NLRB under the microscope at HELP subcommittee hearing

On February 14, the House Subcommittee on Health, Employment, Labor, and Pensions, chaired by Representative Tim Walberg (R-Mich.), held a hearing entitled, “Restoring Balance and Fairness to the National Labor Relations Board.” The Board was criticized under the Obama Administration for becoming more employee and union friendly, and conversely, less friendly to employers and businesses. The majority of the invited panelists at the hearing fell in line with the view expressed in the hearing’s title—that the Board in recent years has lost its “fairness and balance,” leaning away from employers and businesses and more toward employees and unions. One panelist saw it differently, pointing to what she suggested was unwarranted, over-heated rhetoric and criticism leveled at the Board during the last several years.

“In recent years, the National Labor Relations Board (NLRB) has taken a number of troubling actions that undermine the rights of workers and employers, including advancing an ambush election rule and expanding its joint employer standard,” the subcommittee said when it announced the hearing. “Members will discuss the need to roll back harmful NLRB decisions and restore balance and fairness to federal labor law.”

What happened to the neutral arbitrator? At the start of the hearing, Walberg noted that the National Labor Relations Act was signed 80 years ago and that reforms were set into place 10 years later “to enact a basic set of protections for employers as well, such as the right to communicate with their workforce on employment and union-related matters.” The original law and amendments were aimed at providing a level playing field between employers and union leaders. “But more importantly, they are designed to protect the right of workers to make free and informed decisions about whether they want to join a union,” Walberg stressed.

Walberg added that a neutral arbiter was put in place to create and maintain that balance, protect worker free choice, and serve as an unbiased judge over labor disputes. “The goal was to have an impartial referee who would apply the rules of the game fairly and objectively,” he explained. The National Labor Relations Board was that neutral arbitrator, “although you wouldn’t know it from the actions it has taken in recent years,” Walberg said.

Drastic one-sided policy changes. “Unfortunately and in stark contrast to the modest and gradual changes we have seen in previous administrations, the Board over the past eight years has produced some of the most drastic and one-sided policy changes in its history,” said employers’ attorney Kurt G. Larkin, of the firm Hunton & Williams LLP. He said that in virtually every case the, the changes that were made “have worked decided hardships on the employer community.” He pointed to several examples in which he characterized the actions of the Board as:

Promulgating onerous new election procedures that dramatically reduce the time employers have to respond to union organizing campaigns and which “paralyze” them with burdensome administrative tasks.

Establishing an obtuse new standard for creating collective bargaining units that too easily allows unions to gerrymander bargaining units based only on the extent of their organization, setting up the potential to balkanize an employer’s workforce into multiple bargaining units and paralyze it with endless and competing labor negotiations.

Announcing a controversial new test for determining whether a business is the joint employer of the employees of another business. This test, which contravenes decades of settled law, allows for a joint employer finding if a business merely retains the right to affect the employment terms of another business’ employees. Since announcing this test, the Board has sought to force it on the franchising industry, threatening what is arguably the nation’s number one engine for minority and small business growth.

Waging an all-out assault on an employer’s right to maintain commonsense workplace policies, including confidentiality rules, employer arbitration programs, civility codes, and even rules that protect an employer’s legal obligation to investigate and remediate complaints of workplace misconduct and harassment.

“Over-heated rhetoric and criticism.” Attorney Susan Davis, of Cohen, Weiss and Simon, LLP in New York City, which represents employees and unions, reflected a different take on the Labor Board’s actions in the last several years. She said that the “over-heated rhetoric and criticism leveled at the NLRB over the past few years has been unwarranted.”

Davis said that “actual facts, not alternative facts, must guide our analysis.” She used the Browning-Ferris Ind. of Cal. (362 NLRB No. 183 (2015) decision on joint employment as an example of “over-heated criticism of the Board.” There, she noted, the Board “restated its joint employer standard and reaffirmed its commitment to the standard articulated by the Third Circuit in NLRB v. BrowningFerris Ind. of Penn., Inc. (691 F.2d 1117 (3rd Cir. 1982)—that two or more entities that share or codetermine those matters governing essential terms and conditions of employment will be found to be joint employers.”

In returning to that standard, the Board, among other things, criticized more recent decisions for restricting the joint employer analysis “by ‘refus[ing] to assign any significance to contractual language expressly giving a putative employer the power to dictate workers’ terms and conditions of employment,’” according to Davis. “These decisions similarly ignored facts establishing that a company ‘indirectly exercised control that significantly affected employees’ terms and conditions of employment.’”

In addition, Davis observed that:

The Board’s Election Rule has not made it easier for unions to win elections.

A union interfered with an election when it financed a lawsuit that was filed against the employer during the pre-election period (Stericycle, 357 NLRB 582 (2011)); and

Back pay may not be awarded to unlawfully fired undocumented immigrants, even where the employer knew that the workers lacked work authorization (Mezonos Maven Bakery, 357 NLRB 376 (2011).

Rebuilding middle class. “With income inequality at an all-time high and so much of this nation feeling financial pressure and insecurity, now more than ever, employees’ rights to collective bargaining must be protected,” Davis said. “In enacting the National Labor Relations Act, Congress recognized that strong unions were a critical component of re-building a middle class in this country, and history has borne that out. To attempt to neuter the Act and the Board now will only serve to increase income inequality and worsen the condition of the hard-working Americans the President pledged to protect. Exaggerated criticism of the modest and well-grounded actions the Board has taken over the past few years is not what is needed.”